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Find monthly fixed support cost and variable support cost

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Reference no: EM132542133

Molly Flutie, president of First Tool, Co., has asked for information about the cost behavior of manufacturing support costs. Specifically, she wants to know how much support cost is fixed and how much is variable. The following data are the only records available:

Month               Machine Hours                     Support Costs

May                           1,700                              $22,000

June                          1,600                                   $21,000

July                            1,500                                 $19,500

August                        1,400                                  $18,500

September                      1,300                             $18,000

Question 1: Find monthly fixed support cost and the variable support cost per machine hour by the high-low method.

Question 1: Explain how your analysis for requirement question 1 would change if new October data were received and machine hours were 1,650 and support costs were $24,000.

A least-squares regression analysis gave the following output:

Regression equation: Y=$4,050 + $10.50X

Question 3: What recommendations would you give the president based on these analyses?

Reference no: EM132542133

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